The UK needs to attract more Chinese Foreign Direct Investment
The UK needs to attract more Chinese Foreign Direct Investment (FDI) to support British businesses, say leading audit, tax and business advisory firm, Blick Rothenberg.
Winnie Cao, a partner at the firm, said: “China’s Ministry of Commerce (Mofcom) has released its 2024 Statistical Bulletin on Outward Foreign Direct Investment. By the end of 2024, the UK accounted for only 9% of China’s existing investment in developed countries, behind the EU, USA, and Australia. The amount of FDI needs to increase to support business growth in both countries, aligning the UK’s strengths with China’s appetite for long-term investment.”
She added: “There are three key factors the UK should work on to gain more FDI, not just from China, but the wider world.
- A clear and attractive tax regime for international businesses. For instance, a lower Corporate Tax rate, and a longer Foreign Income and Gains (FIG) regime, replacing the current four-year relief period with a ten-year period for expats.
- A business-friendly visa scheme. Currently the increasing pay requirement is making international businesses think twice before coming to the UK.
- An infrastructure that supports business rather than disrupts it. If punctual trainlines can be achieved elsewhere, it must be feasible in the UK given that it invented the stream train in the first place.”
Winnie said: “However, regardless of current FDI levels, the UK and China recognise their value to each other. The UK is the Guest Country of Honour at the 25th China International Fair for Investment and Trade (CIFIT) taking place in Xiamen from 8 to 11 September. There Britain is showcasing its five business strengths: high-tech, healthcare and life sciences, financial/professional services, creative industries, and clean energy.”
She added: “On the 10th of September, the new business secretary, Peter Kyle, will be in Beijing for trade talks. His visit is another sign of renewed effort to rebuild UK–China trade relations after a cooling period in the last few years. His visit coincides with the China International Fair for Trade in Services, which opens on 10th to 14th September in Beijing; services are a strong sector in the UK.”
Winnie said: “It is time to reshape and transform the relationship between China and the UK into something meaningful and beneficial for people and for businesses in both countries.”